Sale of vacant lot

[9544526715ju]

I sold 2 lots last year . the lots I bought  20 years ago . can you show me how and where I report the sales of the lots . I paid property  tax each year ,can I deduct the tax from the profit I made. thanks

[MayaD]

 You must report the sale of vacant land as a capital gain or loss. Form 8949, "Sales and Other Dispositions of Capital Assets," is used to figure the amount of gain or loss from the sale.

To report the sale :

• Select Federal Taxes tab,
• Go to Wages & Income 
• scroll down to Investment Income 
• Select Stocks, Mutual Funds, Bonds, Other.
• Respond "yes" to Did you sell any investments? 
• You'll then be asked Did you get a 1099-B or brokerage statement? 
• you'll answer "no."  Then you'll be shown a list of various investment sales and you'll select "land."
• You'll be taken to the screen that says Enter Land Sale Information and you'll be able to enter your information.  

Enter the amount of gross proceed as it is on form 1099-S then add the deductions/expenses to the cost basis of the land.

 You can deduct property taxes paid on a vacant land as a personal itemized deduction on Schedule A. 

[svdc1]

@ColeenD3 

In 2016, I purchased a vacant corner lot in an established neighborhood with the intent to build my main home. My plans later changed, and I sold the lot in 2021. I want to know if I can include any of the following in the cost basis:

1/ Landscaping services to keep trees and hedges compliant with city code regulations and deed restrictions specific to this lot.

2/Soil report, geotech engineering study, and boundary survey. I ordered these after I bought the lot and provided them to the new buyer when I sold the lot.

[ColeenD3]

1) If it is truly a landscaping improvement you can add it to the basis. If it is just lawn maintenance, then no.

2) When you purchase a property, there are certain settlement charges that can be added to the basis. 

Items added to basis.

 You can include in your basis the settlement fees and closing costs you paid for buying your home. A fee is for buying the home if you would have had to pay it even if you paid cash for the home. The following are some of the settlement fees and closing costs that you can include in the original basis of your home.

Abstract fees (abstract of title fees).

Charges for installing utility services.

Legal fees (including fees for the title search and preparation of the sales contract and deed).

Recording fees. 

Surveys. 

Transfer or stamp taxes.

Owner's title insurance.

Any amount the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, cost for improvements or repairs, and sales commissions. If the seller actually paid for any item for which you are liable and for which you can take a deduction (such as your share of the real estate taxes for the year of sale), you must reduce your basis by that amount unless you are charged for it in the settlement. 

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